There has been a lot of chest thumping and ink spilled in recent days about the announcement that Airbus and Bombardier Aerospace have agreed to transfer control of the new C Series airliner business from the latter to the former.

There are important implications from this transaction in terms of politics and economic policy. My goal here, however, is to focus on the readiness and strategic implications for the two companies involved. In a nutshell, both Bombardier and Airbus saw a window of opportunity open and jumped through it at the right time.

For Bombardier, Airbus brings financial, commercial, and industrial know how and credibility. If you want to be a global player in the market for commercial airliners, then you have to have a global network with a strong backbone, including the robustness and resilience to batten down the hatches during storms, absorb shocks, and bounce back when the weather turns. Bombardier, while technically able in terms of innovation and development, didn’t have the wherewithal to compete against the big boys: Airbus and Boeing. As a business decision, this opportunity makes eminent sense and I’m sure will be a long-term success.

For Airbus, the opportunity was just too good to pass up. Airbus acquires a brand-new design with huge commercial potential, especially in Asia and the Far East. Talks between Airbus and Bombardier had apparently been ongoing for two years or so, but had broken down more than once for undisclosed reasons. The biggest advantage for Airbus, though, is that the tie-up with Bombardier’s C-Series deals a blow to Boeing. Airbus no longer has to continue developing an aircraft in the same size-class as the C-Series, while acquiring new capabilities and geographical reach.

The big loser in this manoeuvre is, however, Boeing. The latter was evidently trying to destroy the C-Series by lobbying for punitive tariffs on the planes if sold in the US. However, Airbus already has facilities in the US to assemble the aircraft. Delta Airlines, Bombardier’s lead customer for the C-Series in the US, has already declared that they will wait for the planes that are assembled in Airbus’s Alabama factory.

The biggest difference between Boeing and Airbus when faced with Bombardier’s competition is the fact that Boeing chose to view the C-Series antagonistically, as a threat, whereas Airbus viewed it positively, as an opportunity. The same goes for Bombardier. Claims and counter-claims of “illegal” government support are overblown. No one is blameless in that regard, and Boeing is probably the most hypocritical of all.

Regardless, from the standpoint of business strategy and business readiness, Airbus and Bombardier have shown that exploiting opportunities are just as important, if not more so, than trying to prevent or mitigate threats, as important as these may be.

Richard Martin issues Strategic Readiness Bulletins on an as needed basis to clients, key decision-makers, and other influencers, to highlight recent or evolving risks, threats, and opportunities for companies and organizations resulting from chaotic change as well as international and national situations of a political, economic, technological, or social nature.

With the current NAFTA negotiations underway it’s hard to tell yet whether they will be a net positive or a net negative for companies doing business across the Canada-US and Mexico-US borders.

My aim isn’t to assess the probabilities either way at this stage, but rather to highlight the need for prudent risk management and contingency planning to address various post-NAFTA—or “new” NAFTA—trade arrangements between Canada and its most important trading partner, specifically the US.

The diagram on the right below summarizes the strategies for risk and threat management. When we work to lower or eliminate the probability of occurrence of a risk/threat, then we’re in the realm of PREVENTION. However, if prevention fails, we still must have measures and plans in place to contain its most damaging consequences. This is where MITIGATION comes into play.

Businesses with NAFTA exposure must be aware of the risks and threats arising from potential changes to the trade agreement. This is prudent and may even lead to the identification of unique opportunities whether Canada-US trade relations continue much as before or change in a significant way.

Who Can Be Affected?

Manufacturers and other businesses that depend on imports and exports

Transportation and logistics companies with cross-border operations

Federal, provincial, and local government agencies and departments

Ports and border-crossing facilities

Tourist and travel related businesses

Sectors that are highly sensitive to changes in tariffs or trade restrictions

Assessing Your Situation

If you haven’t already done so, it’s time to consider the probabilities and potential impacts of the risks and threats your company faces if there is a change in the trading regime under NAFTA, or even just between Canada and US. This isn’t alarmist, it’s common sense and prudent leadership.

I can help you, but you can get a head start by considering the following questions.

What is your current dependence on imports and/or exports to the US (in terms of total revenue, volume, profits)?

What business lines or activities are in areas of HIGH POLITICAL SENSITIVITY (soft wood lumber, auto manufacturing, aerospace, etc.)?

Can you “immunize” to a certain extent against disruptive changes by diversifying your clientele or supplier relationships?

How sensitive are your prices and costs to small changes in trade restrictions and decisions?

Have you developed contingency plans for supply, transport, or logistics?

About Richard Martin

Feel free to contact me to discuss this and related strategic issues.

Richard Martin is an expert in identifying, assessing, and preparing for strategic risks, threats, … AND opportunities, so companies and organizations can exploit change, instead of passively reacting or succumbing to it.

There are an infinite number of ways to be wrong, but only one way to be right. Trial and error is the process of evolution, science, business and innovation. We produce many more “errors” than “successes,” so we must continually experiment with new ways of doing things.

Readiness is the product of this trial and error process. If we continually are working to improve our understanding of our surroundings and what will work to get us to our goals, then we can’t help but adapt to the constantly changing conditions by mitigating threats, and exploiting gaps and opportunities.

I like to think I’m in illustrious company, as shown by this sampling of aphorisms and quotes. I’m particularly fond of the approach of the great philosopher Karl Popper.

“Experience is the name everyone gives to their mistakes.” Oscar Wilde

“What is today called ‘negative feed back’ is only an application of the general method of learning from our mistakes-the method of trial and error.” Karl Popper

“The first principle is that you must not fool yourself-and you are the easiest person to fool.” Richard Feynman

“Reality is that which, when you stop believing in it, doesn’t go away.” Philip K. Dick

“Our whole problem is to make the mistakes as fast as possible…” John A. Wheeler

“Criticism of our conjectures is of decisive importance: by bringing out our mistakes it makes us understand the difficulties of the problem which we are trying to solve.” Karl Popper

“All our knowledge grows only through the correcting of our mistakes.” Karl Popper

“The more we learn about the world, and the deeper our learning, the more conscious, specific, and articulate will be our knowledge of what we do not know, our knowledge of our ignorance. For this, indeed, is the main source of our ignorance – the fact that our knowledge can be only finite, while our ignorance must necessarily be infinite.” Karl Popper

I’ve been answering questions lately (from my daughters, among others) about the threat of war, specifically nuclear war. This obviously comes from the worries about North Korea’s nuclear capabilities and intentions, as well as American ones.

Although this concerns military strategy and geopolitics, the underlying analytical approach can be applied to any consideration of threats, whether a generic SWOT analysis, or the evaluation of a specific security or competitive menace.

Threat analysis goes beyond risk analysis. Risk is the product of the probability and impact of a negative event or cause. Risks are usually categorized under three headings: natural, technological, and human. Focusing on the last, there are criminality, security, labour conflict and many other sub-categories of human originated risks. The problem, however, comes in evaluating the likelihood of a human risk. If we are considering only generic risks, we can talk about probability and impact in abstract terms. For instance, what is the probability of a criminal act? We can use statistics about, say, white collar crime in corporate settings as a starting point for assessing the risk. There are statistics describing the probability of certain acts in certain situations along with average impacts (including their statistical distribution).

But how can we assess a specific threat where there is no historical or statistical data to illuminate the analysis? That’s where military-style threat analysis can be very useful. Military threats are broken into two parts: capability and intent. Capability is self-explanatory: What can the potential or actual enemy do? What are the quantitative and qualitative characteristics of his forces? How many tanks can he deploy? How many aircraft? In the case of North Korea, how many nuclear bombs, of what type, and through what means can they be delivered? I discussed this at length in early September with Dr. Sean Maloney of RMC, an expert on nuclear history and strategy.

While there is uncertainty in capability assessment, at least we’re dealing with tangible realities. Intent is a completely different ballgame. How do we know what the enemy will do? How will he react to our own threats or efforts at conflict resolution? These are imponderables and we must consider a range of scenarios to determine the inevitable commonalities that arise in each, so we can prepare for them. We must also examine the action-reaction cycles that occur because of the moves and countermoves by both sides.

An analogous approach can be used in analyzing and assessing business threats, even though the stakes are obviously of a completely different order and importance. Whether you’re trying to assess your competitors’ next moves, or your market’s reception of your new product, you can learn a lot by considering the threat as both capability and intent. This allows you to disentangle what is possible (given assessed capabilities) from what is probable (given assessed intentions) over a range of scenarios. The insight gained can then be incorporated into your own strategy and contingency planning.

competition (indirect action against antagonists by letting a third party decide in a competitive arena); or

cooperation (combining forces with other actors to achieve mutually compatible or synergistic interests and effects).

These four basic options–conceding, confronting, competing, and cooperating–constitute the building blocks of any strategy.

This is important, because it entails that there are always options when confronted by opposition, resistance, or obstacles of any kind. We can build a strategy that leverages our strengths while mitigating our vulnerabilities and that is not limited to confrontation or aggressive posturing.

So, before embarking on a strategic decision, you should always consider the four options with their potential benefits and costs, as well as their possible and probably consequences.

That’s a quote attributed to Admiral David Farragut of the Union Navy during a battle in the U.S. Civil War. It’s a great quote for anyone who believes you always have to drive at full speed to get to where you want to go. The problem is that it’s only good in special circumstances, usually when you’re backed into a corner and have no other alternative.

I was reminded of this just this past week as I discussed the matter of deliberate planning and consideration of options with a client. She’s a very successful businesswoman who has mostly functioned on the basis of the “damn the torpedoes” approach to decision-making. It’s worked for her on many an occasion, but it’s also gotten her into serious jams that could have easily been avoided with a little rational consideration of her options at important decision points.

She’s one of those entrepreneurs who has always followed her gut and believes she has the gumption to achieve anything she sets her sights on. While this is no doubt true, there is also a cost to her decisions about which goals and courses of action to pursue. She might have a great vision for her business, but it might simply not be the best time to proceed. That’s where strategic patience and self-control come into play. She has to consider the key factors impinging on her decisions and her plans to implement them. Does she have a good chance of success? Are the right conditions there to support her undertaking? Is she paying the right price or is she barreling ahead, “damn the torpedoes” style? And the price isn’t always financial. It can be in time, effort, emotional engagement, physical presence, or any of a number of other commitments she will have to make to make her dreams come to fruition.

A key lesson I learned as an army officer was to try as much as possible to slow down my decision-making in order to consider the full ramifications of the situation and assess the critical factors affecting my decisions and the range of actions at that point. This is called the estimate process. Naturally, you sometimes have to make a quick decision under fire. But this doesn’t mean you act on instinct alone. Intuition can only be an adjunct to a rational decision process, what the army calls a combat estimate. On many occasions, though, no one is shooting at you (yet), so you must take the time to sit down and work out all the factors and options, both for you and the enemy, and then develop a well-thought-out plan. This is known as a deliberate estimate of the situation.

Interestingly, the greater the import of the decision, the more we all tend to rely on our instincts, when it’s exactly the opposite that should be the case. My client, successful as she is, has realized that she must put more effort and self-control into her critical decision-making and planning. She’ll only come out stronger, and so will you if you do the same thing.

New Testimonial

“Richard has been instrumental in getting me to draw on my hard-won experience and ideas to turn them into marketable intellectual property and products. His disciplined, systematic approach has already led to several significant accomplishments for me. Whether you’re just starting out as an entrepreneur, or working to get to the next level, Richard can boost your productivity and organizational effectiveness. Be forewarned, though. There is no magic formula, just systematic thinking, disciplined execution, and… Richard Martin.”

Caroline Salette, Owner and President, RE/MAX Royal Jordan Inc. and Salette Group Inc.

Richard Martin’s Business Readiness Process:

Ensure vigilance through situational awareness.

Do preliminary assessment of tasks and time.

Activate organization or team.

Conduct reconnaissance.

Do detailed situational estimate.

Conduct wargame and decide on optimal course(s) of action.

Perform risk management and contingency planning.

Communicate plan and issue direction.

Build organizational robustness.

Ensure operational continuity.

Lead and control execution.

Assess performance.

Contact me to apply the whole thing–or just a piece, as needed–to improve your strategy, your readiness… and your results!

Did you know that an infantry battalion only needs about 3 to 4 hours of prep and planning time to be battle ready? What are you waiting for to get the same benefits for your outfit?

Why Sunday and What Does “Stand To” Mean?

Sunday? I want you to get my insights and advice first and fast, so you can prepare and up your readiness and results before others even know what’s happening!

And Stand To? It’s the order used in the military to get forces to man the parapets and be in a heightened state of situational awareness and, yes, readiness, so they can face any threat or undertake any mission.

My name is Richard Martin and I’m an expert on applying readiness principles to position companies and leaders to grow and thrive by shaping and exploiting change and opportunity, instead of just passively succumbing to uncertainty and risk.

I’m currently updating a course on crisis and emergency leadership for a government client. It’s a great opportunity to revisit the responsibilities of leaders BEFORE a crisis strikes.

Research shows that most crises have internal causes (see the United Airlines incident, and now the one that has just occurred on an American Airlines flight); they are therefore predictable and can be prevented and mitigated through proper vigilance, preparation, and robustness.

Here are 10 techniques and principles you can apply as an organizational leader to prevent or better prepare for a crisis, before one strikes.

Mobilize your team by anticipating and identifying potential crises before they strike.

Establish priorities for prevention and preparation on an ongoing basis.

Create robust contingency plans to deal with the most likely and most dangerous situations you can envisage.

Implement sound policies and procedures for the most likely crisis situations and events.

Prepare yourself and your team through diligent practice and training.

Employ trusted advisors and associates and ensure they are well qualified and working as a team.

Build as flexible and resilient an organization as possible within the constraints of time and resources.

Work on becoming more self-aware as a leader and seek to acquire the competencies to lead in a crisis.

Develop the support structures and welfare systems you will need to maintain morale, unity and cohesion if a crisis should occur.

And with that, go forth and lead!

New Testimonial

“Richard has been instrumental in drawing on my hard-won experience and ideas to turn them into marketable intellectual property and products. His disciplined, systematic approach has already led to several significant accomplishments for me. Whether you’re just starting out as an entrepreneur, or working to get the next level, Richard can boost your productivity and organizational effectiveness. Be forewarned, though. There is no magic formula, just systematic thinking, disciplined execution, and… Richard Martin.”

Caroline Salette, Owner and President, RE/MAX Royal Jordan Inc. and Salette Group Inc.

Richard Martin’s Business Readiness Process:

Ensure vigilance through situational awareness.

Do preliminary assessment of tasks and time.

Activate organization or team.

Conduct reconnaissance.

Do detailed situational estimate.

Conduct wargame and decide on optimal course(s) of action.

Perform risk management and contingency planning.

Communicate plan and issue direction.

Build organizational robustness.

Ensure operational continuity.

Lead and control execution.

Assess performance.

Contact me to apply the whole thing–or just a piece, as needed–to improve your strategy, your readiness… and your results!

Did you know that an infantry battalion only needs about 3 to 4 hours of prep and planning time to be battle ready? What are you waiting for to get the same benefits for your outfit?

Why Sunday and What Does “Stand To” Mean?

Sunday? I want you to get my insights and advice first and fast, so you can prepare and up your readiness and results before others even know what’s happening!

And Stand To? It’s the order used in the military to get forces to man the parapets and be in a heightened state of situational awareness and, yes, readiness, so they can face any threat or undertake any mission.

My name is Richard Martin and I’m an expert on applying readiness principles to position companies and leaders to grow and thrive by shaping and exploiting change and opportunity, instead of just passively succumbing to uncertainty and risk.

Like this:

Getting there “firstest with the mostest” is crucial, but it can’t just be speed and mass for their own sakes. Readiness is about being vigilant, responsive, and prepared for action at the right time, with the right goals and priorities, the right capabilities, the right resources, and the right people.

The discipline involved in formulating objectives and plans is part of what makes an organization and its actions cohesive and effective.

We are rarely confined to a single hierarchical and functional role. We must make choices and decisions about how to focus our attention and apportion our efforts.

Readiness is about time: the time to consider, plan, and execute actions, and the time it takes to react to evolving conditions, the actions of other stakeholders, and changes to one’s own intentions and plans.

Military commanders and their staffs divide their work into three time horizons: immediate, current operations (or what is happening now), subsequent operations (or what will happen next), and future operations (or what comes after the next operation).

As with military forces, each organization must have time horizons, depending on the nature of the business, competitive conditions, R&D needs, and investment horizons.

Time horizons are inherently related to the hierarchical and functional structure of the organization. Higher-level units have longer timeframes, while lower-level units have shorter timeframes. Strategy, operations, and tactics are related to time horizons and organizational structure.

Strategy determines the existence and fundamental purpose of the organization. Operations is the way the strategy gets translated to action and results. Tactics is what you do with the forces on hand to get the job done now and in the very near future.

The combination of time horizons and organizational levels, with strategy, operations and tactics generates a comprehensive framework to implement the Business Readiness Process.

Richard Martin’s Business Readiness Process:

Ensure vigilance through situational awareness.

Do preliminary assessment of tasks and time.

Activate organization or team.

Conduct reconnaissance.

Do detailed situational estimate.

Conduct wargame and decide on optimal course(s) of action.

Perform risk management and contingency planning.

Communicate plan and issue direction.

Build organizational robustness.

Ensure operational continuity.

Lead and control execution.

Assess performance.

Contact me to apply the whole thing–or just a piece, as needed–to improve your strategy, your readiness… and your results!

Did you know that an infantry battalion only needs about 3 to 4 hours of prep and planning time to be battle ready? What are you waiting for to get the same benefits for your outfit?

Why Sunday and What Does “Stand To” Mean?

Sunday? I want you to get my insights and advice first and fast, so you can prepare and up your readiness and results before others even know what’s happening!

And Stand To? It’s the order used in the military to get forces to man the parapets and be in a heightened state of situational awareness and, yes, readiness, so they can face any threat or undertake any mission.

My name is Richard Martin and I’m an expert on applying readiness principles to position companies and leaders to grow and thrive by shaping and exploiting change and opportunity, instead of just passively succumbing to uncertainty and risk.

There’s an oft-repeated dictum in investment: Avoid investments that are priced for perfection. You should avoid stocks and other investments the price of which reflects all the actual and potential “good news” about its value. In other words, if you overpay, there is very little room for error in your investment, and you risk losing more than gaining, sometimes a lot more.

I like to apply this principle more generally to decision-making, strategy, operations and tactics. So it has obvious value in terms of readiness. If everything has to be “perfect” for your plans to come to fruition, then you’ve left precious little room for error and risk in your assessment of the likelihood of success. How can you apply this principle?

Be conservative when assessing the potential upside of your plans and actions.

Be prudent in identifying potential obstacles, resistance, and risks into your plans.

Make contingency plans to deal with the highest risks and most dangerous threats.

Prepare contingency plans to exploit unexpected success and breakthroughs so you can “make hay while the sun shines,” if that transpires.

Build up reserves of people, money, and other resources.

Have alternate and back up plans for supply, distribution, and operations.

Give primary and alternate tasks, roles and responsibilities.

Explain the overall intention to your team and subordinate leaders so they can adjust on the fly and apply their initiative in achieving your aims when execution goes off the rails.

Make prudent assumptions deliberately and seek to falsify or confirm them with information, intelligence and reconnaissance.

Assume first information is usually wrong, or at least in need of corroboration.

Seek alternate points of view and assessments.

Give yourself and your people time to think and react.

All of this can be summed up with the following three questions:

What if I’m right about this?

What if I’m wrong about this?

What then?

Call that applied self-scepticism.

Richard Martin’s Business Readiness Process:

Ensure vigilance through situational awareness.

Do preliminary assessment of tasks and time.

Activate organization or team.

Conduct reconnaissance.

Do detailed situational estimate.

Conduct wargame and decide on optimal course(s) of action.

Perform risk management and contingency planning.

Communicate plan and issue direction.

Build organizational robustness.

Ensure operational continuity.

Lead and control execution.

Assess performance.

Contact me to apply the whole thing–or just a piece, as needed–to improve your strategy, your readiness… and your results!

Did you know that an infantry battalion only needs about 3 to 4 hours of prep and planning time to be battle ready? What are you waiting for to get the same benefits for your outfit?

Why Sunday and What Does “Stand To” Mean?

Sunday? I want you to get my insights and advice first and fast, so you can prepare and up your readiness and results before others even know what’s happening!

And Stand To? It’s the order used in the military to get forces to man the parapets and be in a heightened state of situational awareness and, yes, readiness, so they can face any threat or undertake any mission.

My name is Richard Martin and I’m an expert on applying readiness principles to position companies and leaders to grow and thrive by shaping and exploiting change and opportunity, instead of just passively succumbing to uncertainty and risk.

What risks (or opportunities) are staring you right in the face? Are you doing anything about them, or are you just hoping that they will go away (in the case of risks and threats) or that they will miraculously come to pass (in the case of opportunities)?

Just off the top of my head, I can think of some major events and changes in conditions that could be risks or opportunities, depending on your perspective, needs, objectives, and readiness to defend them or exploit them:

An incipient refugee crisis in Canada: Think I’m being alarmist? Hundreds are crossing the border now and it’s winter. What might happen when the weather changes, literally and figuratively? I’m sure many in Europe didn’t anticipate how things could turn so quickly in the last two years. Forewarned is forearmed, but only if you think things through and have contingency plans do deal with the possibilities.

“America First”: This goes beyond Donald Trump as president. He isn’t the cause of the wave of nativism, protectionism, and bellicosity in the U.S., but he sure is riding it!

No matter what your role or mission, whether you’re a company, a government organization, a health care provider, educator, or non-profit, these events may affect you, your objectives, your profit, your revenues, even your viability and existence. You must assess these types of changes seriously and determine the nature of the risk and whether it’s a threat or an opportunity.

I’ve started working and putting out a new type of situational awareness and briefing document. I’m calling them Strategic Readiness Bulletins. I’ll be putting them out on an as needed basis to highlight events and changes in the global environment that can impact businesses and organizations in all sectors.

However, nothing beats actually thinking for yourself and putting brainpower into seeing how such changes can be absorbed or exploited, avoided or mitigated.

Oh, and I can help you with this process, any time, any place, quickly and efficiently. But you must contact me first…

Richard Martin’s Business Readiness Process:

Ensure vigilance through situational awareness.

Do preliminary assessment of tasks and time.

Activate organization or team.

Conduct reconnaissance.

Do detailed situational estimate.

Conduct wargame and decide on optimal course(s) of action.

Perform risk management and contingency planning.

Communicate plan and issue direction.

Build organizational robustness.

Ensure operational continuity.

Lead and control execution.

Assess performance.

Contact me to apply the whole thing–or just a piece, as needed–to improve your strategy, your readiness… and your results!

Did you know that an infantry battalion only needs about 3 to 4 hours of prep and planning time to be battle ready? What are you waiting for to get the same benefits for your outfit?

Why Sunday, and What Does Stand To Mean?

Sunday? I want you to get my insights and advice first and fast, so you can prepare and up your readiness and results before others even know what’s happening!

And Stand To? It’s the order used in the military to get forces to man the parapets and be in a heightened state of situational awareness and, yes, readiness, so they can face any threat or undertake any mission.

My name is Richard Martin and I’m an expert on applying readiness principles to position companies and leaders to grow and thrive by shaping and exploiting change and opportunity, instead of just passively succumbing to uncertainty and risk.